The United States District Court for the Eastern District of Pennsylvania, applying Pennsylvania law, found that an attorney “knew or should have known” he might get sued for (allegedly) botching a settlement term sheet where a worker’s compensation review board publicly criticized his handling of the settlement, even though his client did not appear angry at the time. Zavodnick, Zavodnick & Lasky, LLC v. Nat’l Liab. & Fire Ins. Co., 2019 WL 1003157 (E.D. Pa. Mar. 1, 2019). Because the insured attorney knew the relevant facts before his professional liability policy incepted, the district court granted the insurer’s motion for summary judgment that there was no coverage.

The U.S. District Court for the Southern District of California, applying California law, has held that neither fiduciary nor employment benefits liability coverage applied to claims seeking benefits under an insured company’s employee benefits plan because the company’s liability arose, not from negligent acts or breaches of fiduciary duty, but from its contractual obligation to provide employees with benefit plans. Erickson-Hall Constr. Co. v. Scottsdale Ins. Co., 2019 WL 719204 (S.D. Cal. Feb. 20, 2019).

Applying Wisconsin law, a federal district court has held that an insurer owed no duty to defend or indemnify its insureds because exclusions for claims arising from violations of securities laws or consumer protection laws, and from the failure of investments to perform as desired, barred coverage. Hanover Ins. Co. v. BMOC, Inc., 2019 WL 949215 (W. D. Wis. Feb. 27, 2019).

The Ninth Circuit, applying California law, has held that an insurer improperly failed to defend its insured in connection with a lawsuit alleging that the insured engaged in an ongoing mortgage modification fraud scheme, because one count in the lawsuit did not require willful conduct and therefore was not necessarily uninsurable under California Insurance Code § 533. First One Lending Corp. v. Hartford Casualty Ins. Co., 2017 WL 1018305 (9th Cir. Mar. 5, 2019). The court further held that a financial services exclusion did not completely bar coverage because at least some allegations bore an “insufficient causal nexus with financial services,” thus triggering the insurer’s duty to defend.

The United States District Court for the Central District of California, applying California law, has held that an insurer was not entitled to summary judgment in full, finding that triable issues of fact remained regarding the insurer’s alleged failure to provide an immediate defense to the insured corporation and to assign separate counsel for an insured director. Celerity Educ. Grp. v. Scottsdale Ins. Co., 2019 WL 430497 (C.D. Cal. Feb. 4, 2019).

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Wiley Rein’s Insurance Group is one of the largest and most prominent insurer-side practices in the United States. More than 50 lawyers represent numerous insurers on a wide variety of matters throughout the country. Recognized by Chambers USA as a highly regarded insurance giant, we represent insurers and industry organizations in claims, underwriting, and regulatory matters as well as in complex settlements and transactions. Read More.